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1. Research Paper
Impact Factor: 4.729
Refereed, Listed & Indexed
IJBARR
E- ISSN -2347-856X
ISSN -2348-0653
International Journal of Business and Administration Research Review, Vol. 2, Issue.17, Jan - March, 2017. Page 141
A STUDY ON THE IMPACT OF MICRO FINANCE IN EMPOWERMENT OF SELF-HELPGROUPS’ WOMEN
IN VISAKHAPATNAM DISTRICT
Tatayya Bommali
Research Scholar of Andhra University, Visakhapatnam and Lecturer in Commerce, N.H. Goel World School, Chhattisgarh.
Introduction
In olden days in most of the family male members were meant for earning income to the family where as the female members
looked after the house works. In most of the family it was followed. After some time it was felt that if the female members
are involved in some works other than the family affairs it would be the support extended by them to their spouse and family
members. Therefore, in some family the female members were allowed to work in some industries and agriculture. Most of
the women members supported to the family members the work or job involved by the male members of the family. Being
India a country having more than 65 percent of its population are residing in rural areas. They depend only on agriculture and
allied industries of agriculture. Due to the failure of rainfall and problems of insects and the monsoon nowadays the farmer
could not earn even the amount incurred by them to cultivate the produces. But the necessity of the family is going on
increasing day by day. Further, the prices of the domestic utilities are also increasing like anything. It is very difficult to run
the family with single earning. Therefore, it is necessary for both the male and female members in the family to bring income
to meet their requirements.
In urban areas, there is more number of industries, which provide employment opportunities to both of the gender. However,
if consider the position of the village women, they do not have much awareness on industrial work. Further, they have only
limited literacy knowledge, which paved them to engage only in agriculture labour, which further made them weak in their
financial position, as there is only limited scope for income in the agriculture work. Hence, most of the family in the rural
parts of the country led a very poor life, which worsens the younger generation particularly in education. To minimize the
unemployment problems in the rural areas and to generate the income to the family in the rural parts, the central government
introduced Micro Finance to encourage the rural public to generate income to their family by way of doing small business or
involved in some self-employment activities. As a part of the development of women in the rural areas, Self-help groups
were established in the year 1993-94 in Uthrapradesh. But the evolution of SHGs commenced in 1990s. Micro finance plays
vital role in the empowerment of women particularly in the village areas by providing financial assistance through self-help
groups in the local areas since 1990. Andhra Pradesh government emphasizes more on the development of women through
Self-help groups. The banks are given direction to provide more volume loan to the self-help groups. More number of self-
help groups was established in all villages. NGOs and government create awareness among all women in the rural areas to
form self-group even for each line and street in all villages of Andhra Pradesh. We happened to see number of SHGs is being
established and functioning well. The self-help group members are involved in various activities like running a canteen,
manufacturing pickles and handy crafts and cloth items, etc. The local banks are adopting the particular villages for providing
loan to self-help groups. Though the Micro finance extends maximum support to the development of women and the self-
help groups, the members in self-help groups have different views about micro finance and face many issues in getting the
loan and the repayment of the loan. In many occasions, the members in self-help groups are compelled by family members
not to involve in SHGs activities because of various reasons. In some of the SHGs the income level of the members is very
low when compared with the income from other SHGs. What are the actual causes? What is the role of micro finance in
empowerment of women? To know all these reasons a thorough study is to be undertaken.
Statement of the Problem
Micro finance scheme has been introduced by the central government initially with the view to promote the income sources
of the village people by providing financial support to the weaker section particularly in rural parts of the country. Further, it
was extended to support the SHGs in all parts of the country for the empowerment of the women and to improve the income
level of the individual family. In some of the SHGs the financial support provided by the bank through micro finance is not
utilized for the productive purpose where as it is used by the female members for the domestic expenses of the family. On the
due date, the repayable amount is collected by in- charge member from all the members and repaid to the bank on the due
date. In some of the SHGs the organizers misuse the funds and made little bit delay in repay the installment amount to the
bank. It is reported that there is a part of political involvement in sanctioning the loan to SHGs
Significance of the Study
The purpose of the micro finance is to provide financial support to the weaker section who leads their normal life below BPL.
Micro finance is provided to all unemployed to have self-employment. However, the bank managers provide loan to the
applicants without considering the repaying capacity of the borrowers. It is reported that only in SHGs the bank managers do

2. Research Paper
Impact Factor: 4.729
Refereed, Listed & Indexed
IJBARR
E- ISSN -2347-856X
ISSN -2348-0653
International Journal of Business and Administration Research Review, Vol. 2, Issue.17, Jan - March, 2017. Page 142
not face the collection of outstanding and arrears fro the borrowers. The SHGs are provided with adequate loan for the
development of the SHGs in all possible ways. The members of the self-help groups are given support and advice even for
marketing their products. Until in many villages, the numbers SHGs formed is not sufficient when we consider the number of
SHGs and the total women population in the village. Many women do not about the micro finance and its support to the
development of women. So is the right time to have thorough study about “A study on the impact of micro finance in
empowerment of self-help groups’ women in Visakhapatnam district” and it is inevitable to bring betterment to the women in
general.
Objectives of the Study
1. To evaluate the role of micro finance in the empowerment of women.
2. To measure the level of satisfaction of the members in SHGs regarding the support extended by the government and
banks through Micro finance.
3. To know the procedures for availing micro finance and make awareness to the members of SHGs about micro
finance and its uses for the development of women.
4. To analyze the problems faced by the members in availing financial support through micro finance.
5. To find remedial measures to solve the issues in Micro finance and offer recommendations to the authorities
concerned to do the needful to avail the micro finance to all the SHGs without any hurdles.
Research Methodology
Research Design
Descriptive research was conducted in this study to make the research effective and useful to the needy.
Collection of Data
Both the primary and secondary data were collected in this research work
Primary Data
Primary data was collected from the sample respondents from the population by way preparing a questionnaire. The
questionnaire was prepared with the guidance of the experts in the relevant field. Necessary corrections were made in the
questionnaire to complete the research work successfully.
Secondary Data
Secondary data was collected from the journals and magazine published in the related topics.
Sample Selection
The population for the study is members in SHGs formed in Visakhapatnam district, 100 women respondents were selected
at random by using convenient sampling method from 10 SHGs operating successfully in Anandapuram, Padmanabham
villeges Visakhapatnam of District.The sample respondents consists of only female members in all selected SHGs in
Anandapuram, Padmanabham villeges of Visakhapatnam of District. In each SHGs 10, members were selected at random.
Study Period
The study period for the research work covers 2-month period starting from November 2016 to December 2016.
Study Area
Visakhapatnam District is being one of the districts, which are having more acres of cultivable land and depending more on
agriculture income in Andhra Pradesh. Further, the Visakhapatnam district does not have adequate development in the
industrial sectors. The women in Visakhapatnam district have limited sources for generating income where the role of SHGs
and Micro finance will surely help to the empowerment of women and improve the income of the individual family. Hence,
the researcher selected Visakhapatnam district for his research work.
Statistical Tools
The collected data was analyzed and interpreted properly to find the result of the research work. Further to know the
association between two variables in deciding the particular issues statistical tools like simple percentage, chi-square, rank
correlation, ANOVA, ‘t’ test and regression were used.
World Bank (1978)1
in its study found that volume of migration of women has been increasing more rapidly than that of
males of the last several decades. It is also observed that employment among women from the lower middle class and
1
World Development Report (1978), The World Bank, Year book of Labour Statistics, August, Washington
D.C.

3. Research Paper
Impact Factor: 4.729
Refereed, Listed & Indexed
IJBARR
E- ISSN -2347-856X
ISSN -2348-0653
International Journal of Business and Administration Research Review, Vol. 2, Issue.17, Jan - March, 2017. Page 143
poor socio-economic groups is more common than it is among the elite. The women labourers engaged in the
unorganized segment suffer from disabilities and exploitation of much higher magnitude than those employed in
organizedsector.
Manimekalai and Rajendran (1993)2
in their study found that the DWCRA was helping and promoting self-employment
among the rural women who are below the poverty line. It helped them in organizing the beneficiaries
in group activities and promotes economic and social self- reliance.
Sivasankaraiah and Ramappa (1993)3
in their study concluded that the marketing of product made by the members of the
DWCRA group is very important. The interest of women in the programme can be sustained only when a proper market is
arranged for their products.
Rajakutti and Prita Sarkar (1994)4
in their study opined that orientation of panchayat members and bankers towards the
philosophy of DWCRA and than imaginative and committed role of NGO would be a contributing factor for the success of
DWCRA programme.
Hemalatha Prasad (1995)5
in his study identified certain common factors, for success of self-help groups, like homogeneity of
the group in terms of caste occupation and locality made the group more cohesive, assured and regular income from the
scheme. Effective and dynamic leadership, awareness about the repayment procedures and consequences of the non-
repayment influenced their repayment behaviour the study identified that systematic planning for skill training, raw material
supply, quality control and marketing support from officials were the key factors for the effective management of the
programme,
Table 1: Association Between Educational Qualification and Satisfaction Regarding the Facilities in the Bank
Factor Calculated value χ2
Table value DF Remarks
Educational qualifications 55.486 15.507 8 Significant
It is obvious from the above table that the calculated chi-square value is more than the table value and the result is significant
at 5% level of significance. Hence the hypothesis “education of the respondents and the response regarding the satisfaction
about the facilities in the bank are associated holds good. From the analysis it is concluded that there is a close relationship
between the education of the respondents and their response regarding the satisfaction about the facilities in the bank
Table 2: Association Between Monthly Income and Satisfaction Regarding the Facilities in the Bank
Factor Calculated value χ2
Table value DF Remarks
Monthly income 22.921 18.307 10 Significant
It is obvious from the above table that the calculated chi-square value is greater than the table value and the result is
significant at 5% level of significance. Hence the hypothesis “monthly income of the respondents and the response regarding
the satisfaction about the facilities in the bank are associated hold well. From the analysis it is concluded that there is a
relationship between the monthly income of the respondents and their response in regarding the satisfaction about the
facilities in the bank.
Table 3: Association Between Occupational Status and Satisfaction Regarding the Facilities in the Bank
Factor Calculated value χ2
Table value DF Remarks
Occupation 15.448 15.507 8 Insignificant
2
Manimekalai N., and Rajendra R. (1993), “Self – employment through DWCRA”, Kurukshetra,
Vol.XLI, No.10, pp.5-9.
3
Sivasankaraiah M., and Ramappa, P., (1993), “Impact of DWCRA on
Rural Areas”, Kurukshetra, July, Vol.XLI, No.10.
4
Rajakutti, S., and Pritha Sarkar (1994), “A DWCRA Odysseys in North the Paragons – A Learning
Experience”, Journal of Rural Development, Vol.13, No.3, July – September, pp.375-396.
5
Hemalatha Prasad C (1995), “Development of Women and Children in Rural Areas: Successful Case
Studies”, Journal of Rural Development, Vol.14, No.1, January – March.

4. Research Paper
Impact Factor: 4.729
Refereed, Listed & Indexed
IJBARR
E- ISSN -2347-856X
ISSN -2348-0653
International Journal of Business and Administration Research Review, Vol. 2, Issue.17, Jan - March, 2017. Page 144
It is obvious from the above table that the calculated chi-square value is less than the table value and the result is not
significant at 5% level of significance. Hence the hypothesis “occupation of the respondents and the response regarding the
satisfaction about the facilities in the bank are associated does not hold well. From the analysis it is concluded that there is no
relationship between the occupation of the respondents and their response in regarding the satisfaction about the facilities in
the bank.
Findings of Simple Percent Analysis
After making tabulation of the collected data, the data was analyzed by using simple percent analysis. Firstly the
demographics profile of the respondents was simply analyzed. The major findings from simple percent analysis are presented
below.
Major proportion (31.9%) of the respondents speaks Tamil language. Most (52.9 %) of the respondents are married. Majority
(33.6%) of the respondents are belonged to the age group of 36-45 years Considerable proportion (53.4%) of the respondents
follows Hindu religion
Majority (40.7%) of the respondents is from the backward community.
When we analyze the residential status, majority (40%) of the respondents are from semi-urban area Majority (32.9%) of the
respondents get a monthly income of Rs. 6001-8000, Most (40%) of the respondents have 3 dependents in their family,
Majority (46.7%) of the respondents have only one earning member in their family.
The occupation status of the respondents was analyzed. It is found that considerable amount (30%) of the respondents of the
respondents are labour and most (33 %) of the respondents are involved in farming work.
Most of (48.4 percent) the respondents have savings bank account with the bank, and considerable volume (80 percent) of the
respondents informed that they have already applied for loan with bank. Major proportion of the (42.6 percent) respondents
informed that they have applied for short term loan. And majority (72 percent) of the respondents informed that the training
is provided by bank.
The type and nature of account and information about the loan obtained from the bank was analyzed and it was inferred that
56 percent of the respondents have Savings Bank account. 73.1 percent of the respondents do not have account with more
than one bank. 33.1 percent of the respondents have known about micro finance through their friends and 40.1 percent of
the respondents have good knowledge about micro finance.
Majority of the (66.79 percent) of the respondents conveyed that guarantee by existing account holders is necessary for
getting loan and most (60.12) percent of the respondents told that there is no necessity for security when we apply loan to
Self Help Group. 53.4 percent of the respondents apply loan with bank for the purpose of developing the existing business.
40 percent of the respondents informed that no subsidy is provided for micro finance. 46.79 percent of the respondents told
that 20% of the loan is given as subsidy.
Chi-Square Test
From the analysis it is concluded that there is a close relationship between the age of the respondents and their response in
response regarding the satisfaction about the overall development after joining the SHGs
From the analysis it is concluded that there is a close relationship between the education of the respondents and their response
regarding the satisfaction about the overall development after joining the SHGs
From the analysis it is depicted that there is a relationship between the monthly income of the respondents and their response
in satisfaction about the overall development after joining SHGs
From the analysis it is inferred that there is a relationship between the occupation of the respondents and their response in
regarding the satisfaction about the overall development after joining the SHGs
From the analysis it is found that there is no relationship between the native of the respondents and their response regarding
the satisfaction about overall development after joining the SHGs.
From the analysis it is found that there is a relationship between the nature of work of the respondents and their response in
regarding the satisfaction about overall development after joining the SHG.
Suggestions and Conclusion
The empirical findings of the study suggests that microfinance has a profound influence on the economic status, decision
making power, knowledge and self worthiness of women participants of self help group linkage program in Visakhapatnam.
Whereas it fails to include the poorest section and in improving assets position of the participants, as loans are ‘micro’ in
their magnitudes and duration between dosages of loans are large.

5. Research Paper
Impact Factor: 4.729
Refereed, Listed & Indexed
IJBARR
E- ISSN -2347-856X
ISSN -2348-0653
International Journal of Business and Administration Research Review, Vol. 2, Issue.17, Jan - March, 2017. Page 145
Today microfinance is striving to match the convenience and flexibility of informal sector while adding flexibility and
continuity. Thus academic literature shore up and buoyant on microfinance as a tool of development and assures of its
potential strengths to make significant difference in lives of hopeless and struggling millions of poor in India as well as
world. The finding of the study calls for an extension of the government support and redesigning micro finance programs
suited for better and effective execution for achieving full benefits. The study confirms that as an anti poverty tool,
microfinance has its own limitations to reach the bottom of the poor. However, it is found effective in graduating the poor,
not the poorest, and lower middle class to a higher standard of living. Though different studies at various places and points of
time differ in their conclusion, the present study acknowledge that despite of bottlenecks, microfinance is capable of
graduating struggling poor from their shackles and helps to upscale them to a better living and playing a significantly positive
role in upgrading women empowerment
Therefore, the study enlightens the role of continuous succeeding doses of microfinance loans and ensuring its yield oriented
utilization, for achieving the targeted objectives of microfinance programs Among the six factors identified (microfinance
related factors, household factors, assets, marital status, personal factors and social factors) through factor analysis,
microfinance related factors are found to be having more significant and positive influence on women empowerment.
The microfinance related loan availement and its productive utilization found to be causing significant differences in women
empowerment levels, measured through women empowerment index (WEI), of the loan availed participants as compared to
the non- loan availed.
Microfinance sector has been witnessing tremendous progress in the recent years. There has been Phenomenal growth in the
number and volumes of MFIs .The sector has witnessed many new elements like participation from private and multinational
banks, private equity and venture capital funds, wholesale fund providers, rating agencies, international retail institutions.
The concept of microfinance seems to have earned an almost mythical reputation as the panacea of problems of under
development. Microfinance is believed to play vital role in development by helping the poor to meet basic needs
improvement in economic welfare as well as women empowerment. The foregoing analysis indicates that microfinance
activity and self help group participation has a positive impact on the income, assets, occupation, savings, and access to
loans, bank connectivity, knowledge, self worthiness, and decision making level of the participants. Through factor analysis
and regression, the study empirically supports the positive relationship between microfinance and women empowerment, in
congruency with the microfinance literature. The study attempts to contribute the microfinance literature by comprehending
the current experience of using microfinance as a financial mediator for building up and augmenting women empowerment
References
1. World Development Report (1978), The World Bank, Yearbook of Labour Statistics, August, Washington D.C.
2. Manimekalai N., and Rajendra R. (1993), “Self – employment through DWCRA”, Kurukshetra, Vol.XLI,
No.10, pp.5-9.
3. Sivasankaraiah M., and Ramappa, P., (1993), “Impact of DWCRA on Rural Areas”, Kurukshetra, July, Vol.XLI,
No.10.
4. Rajakutti, S., and Pritha Sarkar (1994), “A DWCRA Odysseys in North the Paragons – A Learning
Experience”, Journal of Rural Development, Vol.13, No.3, July – September, pp.375-396.
5. Hemalatha Prasad C (1995), “Development of Women and Children in Rural Areas: Successful Case
Studies”, Journal of Rural Development, Vol.14, No.1, January – March.